December 5, 2019 / 6:07 PM / 2 months ago

Iconix Brand former CEO charged with accounting fraud

Dec 5 (Reuters) - Iconix Brand founder and former Chief Executive Officer Neil Cole has been charged with accounting fraud, along with former Chief Operating Officer Seth Horowitz, according to a court filing on Thursday.

According to a complaint filed by the U.S. Securities and Exchange Commission, the former executives manipulated revenue and earnings figures at the apparel licensing company by convincing a joint venture to artificially hike the price it would pay Iconix for intellectual property assets with promise of paying back later.

The joint venture overpaid $5 million in the second quarter of 2014 and $6 million in the following quarter that enabled Iconix to top Wall Street estimates for revenue and a key earnings per share metric, according to the complaint.

While Horowitz, 43, was involved only in one transaction, Cole, 62, who was the CEO at the time, negotiated key aspects of both deals, according to the complaint.

Cole stepped down from the top job in August 2015, after about 10 years at the helm. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Shailesh Kuber)

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